Interest rates have been slashed by 75 basis points from 10.75-11.25% to 10-10.5% as a result of a reduction in cost of funds.

Chief Executive Officer of LICHF, RR Nair said, "The incremental cost of funds have come down to around 8.25-8.75 percent, as against over 11 percent in October. So we have decided to pass on the benefits to existing customers."

Nair said, "With this cut, we have reduced our rates by 150 basis points in the last three months, which is more than what we increased across three tranches last year."

Meanwhile the firm had also announced a special interest rate for borrowers planning to choose floating rate loans. The special floating rates for loans up to Rs 30 lakh are 8.75% where as loans above Rs 30 lakh and up to Rs 75 lakh, interest rate charged will be 9.5-9.75%. For loans above Rs 75 lakh, LICHF will charge 10.5-10.75%.